With lawmakers poised to confer over the nearly $3 trillion fiscal 2008 budget, the fiscally conservative Blue Dog Coalition is warily eyeing a Senate provision that would threaten their early victory in reviving “pay-as-you-go” spending rules in the House.

“Blue Dogs are serious about PAYGO,” said a Democratic aide to one Blue Dog lawmaker, referring to spending provisions re-established in House rules at the outset of the 110th Congress.

Negotiations between House and Senate chairmen over the budget have focused, in part, over whether to continue tax cuts enacted under the previous Republican majority that would otherwise expire in 2010. The Senate version, under a proposal by Sen. Max Baucus (D-Mont.), would allow those some of provisions to continue, funded by a projected budget surplus.

Blue Dog Democrats object to that proposal, however, arguing that it would violate PAYGO rules because the surplus would not materialize for several years. Although the coalition has not established a formal opposition to the Baucus amendment, PAYGO is among the group’s top priorities.

Nonetheless, Senate lawmakers have said they will push to maintain the measure, and House Republicans are expected to force a vote on the proposal in their own chamber Tuesday via a procedural motion to instruct budget conference conferees.

Brian Kennedy, spokesman for House Minority Leader John Boehner (R-Ohio), declined to detail what GOP lawmakers will propose, stating only: “It will be designed to ensure that American families keep the tax relief provisions that were signed into law under the Republican Congress.”

Another Republican aide, who spoke on the condition of anonymity, similarly declined to specify what the measure — which advises conferees to act in a certain way but is not binding — would contain, but acknowledged that it would focus “at least in part” on tax provisions.

“It would be very difficult for a conference report to go through that didn’t have [the] Baucus [amendment] in it,” the aide asserted.

But the Democratic aide dismissed the idea of Republicans forcing such a vote, noting the measure still must be dealt with in conference.

“We can have that fight now. We can have it in conference. We can have it in private. We can have it in public,” the aide said.

In the meantime, House Budget Chairman John Spratt (D-S.C.) is composing a “trigger” provision that would require the surplus to materialize before any tax provisions could be extended. While the details have yet to be finalized, Democratic sources suggested the measure also could contain prohibitions limiting only a percentage of any surplus to subsidizing tax cuts.

Blue Dog lawmakers are expected to back the proposal. “Certainly there’s room for compromise on this,” the Democratic aide said.

The House is scheduled to vote today on a motion that would allow it to appoint conferees to the budget negotiations, and is expected to name those lawmakers today or Wednesday, with a vote on the conference report as early as next week.